Theme and Background
This chapter focuses on the core changes in the global macroeconomy in 2025, exploring how deglobalization, energy security, and populism are reshaping the market landscape, as well as the divergence between critical materials and traditional commodities. The report argues that these forces will dominate the commodity cycle over the next year, particularly the performance of energy transition-related materials.
Core Views
- Deglobalization will intensify in 2025, driven by protectionism, trade tensions, and geopolitical instability. US tariff policies may trigger a global trade war, suppressing GDP growth and fueling inflation.
- Energy security combined with populism will push countries to prioritize domestic energy production, reducing reliance on global markets, especially energy dependence on geopolitical rivals.
- Critical materials (uranium, copper, silver) will lead the commodity cycle, further decoupling from traditional "China-dominated" commodities (iron ore, metallurgical coal, crude oil) and maintaining outperformance.
Key Arguments and Data
- Drivers of deglobalization: COVID-19 exposed supply chain vulnerabilities; the Russia-Ukraine war highlighted Europe's energy dependence; US-China trade tensions since 2018 may escalate under the new Trump administration, potentially affecting allies such as the EU.
- Policy uncertainty: Proposed US tariffs on China, Mexico, and Canada could trigger a global trade war, reducing global GDP growth, fueling inflation, and dampening consumption and business investment.
- Regionalization trend: Countries are prioritizing new regional agreements with neighbors and localizing supply chains to mitigate global trade risks.
- Energy security and populism: Policies in 2025 will emphasize "America First" and Europe's shift away from Russian natural gas; although renewable energy faces populist resistance, it can be repackaged as a tool to promote national security, employment, and self-sufficiency.
- Critical materials vs. China-dominated commodities: Since January 7, 2022 (baseline=100), the price increase of the critical materials basket (uranium, copper, silver, equal weight) has significantly outpaced that of the China-dominated basket (iron ore, metallurgical coal, Brent crude oil, equal weight), as shown in Figure 1. The report expects this trend to continue in 2025, driven by demand from electrification, digitalization, and the energy transition.
| Commodity Basket |
Composition |
Performance (since Jan 7, 2022) |
| Critical Materials Basket |
Uranium, copper, silver (equal weight) |
Significantly outperformed |
| China-Dominated Basket |
Iron ore, metallurgical coal, Brent crude oil (equal weight) |
Relatively underperformed |
- China's changing role: China's economic model is shifting toward balancing exports, domestic demand, and technological self-sufficiency, potentially reducing demand for traditional commodities like iron ore and metallurgical coal, exacerbating their relative weakness.
Companies/Assets Involved
- Uranium, copper, silver: As components of the critical materials basket, these are viewed favorably by the report, with upward price pressure expected.
- Iron ore, metallurgical coal, Brent crude oil: As components of the China-dominated basket, these are relatively underperforming, affected by China's economic transition and deglobalization.
- US Inflation Reduction Act (IRA): The report notes that some infrastructure spending may be cut due to populist pressure, but spending benefiting specific states may be protected.
Investment Implications
- Go long on critical materials (uranium, copper, silver) and short or underweight traditional China-dominated commodities (iron ore, metallurgical coal, crude oil), as structural demand from electrification, digitalization, and the energy transition will continue to support the former, while China's economic slowdown and deglobalization weaken the latter.
- Focus on regionalized supply chain opportunities: Invest in companies benefiting from localized production and energy independence policies, such as US domestic energy infrastructure and renewable energy manufacturing.
- Be wary of trade war risks: Tariff escalation could fuel inflation and suppress economic growth; hedge against related macro risks by allocating to gold or inflation-protected assets.
Theme and Background
This chapter focuses on the resilience of the energy transition amid policy uncertainty in 2025, the inevitability of heightened market volatility, and the profound impact of the Fourth Industrial Revolution (4IR) on energy demand. The author argues that while Republican control of the US executive and legislative branches may lead to policy rollbacks, the core framework of clean energy is likely to remain intact. Meanwhile, AI-driven surges in energy demand and the industrialization of emerging economies will serve as key growth drivers.
Core Views
- The impact of energy transition policy rollbacks is overestimated: Even if the Inflation Reduction Act (IRA) tax credits are fully repealed, solar, wind, and energy storage installations will still more than double between 2025 and 2030, only 19% lower than the baseline scenario. Full repeal faces multiple obstacles from political, economic, and public support.
- Market volatility will dominate in 2025: A bull case (AI boom + tax cuts + deregulation) coexists with a bear case (sticky inflation + tariff wars + ballooning deficits). Bond markets have already begun pricing in fiscal risks, and the Federal Reserve may pivot hawkish.
- The Fourth Industrial Revolution reshapes energy demand: Electricity demand from AI data centers, machine learning models, and digital infrastructure is surging, highlighting nuclear energy's strategic role as a zero-carbon baseload power source. Urbanization and industrialization in emerging economies will intensify demand for electricity and materials.
Key Arguments and Data
1. Limited impact of IRA repeal:
- BloombergNEF analysis shows that full repeal of IRA tax credits would reduce cumulative solar, wind, and energy storage installations by an average of 19% from 2025 to 2030, but total installations would still more than double.
- Factors hindering full repeal: Red states have attracted significant clean energy investments (creating jobs and economic growth); clean energy technologies enjoy bipartisan public support; companies have made long-term investment commitments based on existing incentives.
- Partial modifications or targeted revisions are more likely, but may have unintended consequences due to policy interconnections.
2. Sources of market volatility:
- Bull case drivers: AI technology boom, tax cuts, deregulation, corporate earnings growth, global capital inflows into the US, record stock buybacks.
- Bear case risks: Government deficit expansion pushes up long-end bond yields (term premium widening, real interest rates rising); a stronger dollar pressures emerging markets; tariff wars and competitive currency devaluations; sticky inflation forces the Fed to pause rate cuts or even hike; geopolitical instability.
3. Structural changes in energy demand:
- AI becomes a key driver: Microsoft announced an $80 billion investment in building AI data centers, which will benefit key materials (e.g., copper, uranium).
- Nuclear energy positioning: As a zero-carbon baseload power source, nuclear energy is a sustainable solution to support exponential AI growth and global decarbonization. In 2025, synergistic investments in AI and nuclear infrastructure will accelerate.
- Emerging economies: Rapid urbanization, infrastructure construction, and manufacturing expansion will boost demand for electricity, transportation, and building materials.
Companies/Assets Involved
- Microsoft: Plans to invest $80 billion in building AI data centers, representing tech giants' massive commitment to AI infrastructure, indirectly benefiting key material suppliers (e.g., uranium, copper).
- BloombergNEF: Provides quantitative analysis of IRA repeal scenarios, serving as third-party research support.
- Uranium-related assets: As nuclear energy is central to AI's energy solution, uranium demand prospects are strong (echoing the report's first part on uranium fundamentals).
- Key materials: Copper, lithium, rare earths, and other energy transition materials will benefit from AI data center construction and emerging economy industrialization.
Investment Implications
- Overweight nuclear-related assets: AI-driven electricity demand surges make nuclear energy a growth area with certainty. Focus on uranium miners and nuclear infrastructure developers.
- Buy clean energy on dips: Policy rollback risks are overpriced by the market. The actual growth trajectory for solar, wind, and energy storage remains robust, and current valuations may offer buying opportunities.
- Beware of market volatility: With mixed bullish and bearish factors in 2025, consider managing risk through options strategies or allocating volatility hedging tools. Monitor bond yields and Fed policy pivot signals.
- Focus on emerging market material demand: Urbanization and industrialization will support long-term demand for base metals like copper and aluminum, but be cautious of exchange rate risks from a stronger dollar.
Theme and Background
This chapter focuses on the market outlook for key materials (uranium and copper) in 2025. The report argues that against the backdrop of structural growth in energy demand, supply chain constraints, and overlapping geopolitical risks, the fundamentals for uranium and copper continue to strengthen, potentially triggering a new commodity supercycle.
Core Views
- Uranium: Despite a 19.67% pullback in spot prices in 2024, the market is in a bull-market correction phase. Fundamentals (accelerating demand, constrained supply, policy support) continue to strengthen, and prices are expected to rise further in 2025.
- Copper: Prices rose only 2.23% in 2024, but the demand structure is shifting from traditional economic indicators toward AI, the energy transition, and emerging economies. A widening supply deficit will support strong performance in 2025.
- Counter-Intuitive Judgment: The short-term decline in uranium prices is a healthy correction, not a trend reversal. Copper demand has already decoupled from China's real estate sector, pivoting toward infrastructure and technology, making it resilient to tariff shocks.
Key Arguments and Data
Uranium Market
- Spot prices surged nearly 90% in 2023, then corrected 19.67% in 2024. However, the lowest, average, and highest spot prices in 2024 all exceeded recent-year levels (see Figure 3).
- Long-term contract prices hit a 16-year high in 2024.
- 31 countries committed at COP29 to tripling nuclear power capacity by 2050.
- Microsoft signed a 20-year power purchase agreement to support the restart of the Three Mile Island nuclear plant.
- Global uranium mine output is insufficient to meet reactor demand, sustaining a structural supply deficit.
- No major new mines are expected to come online in the next 3–5 years, potentially deepening the supply gap.
- The unexpected shutdown of the Inkai joint venture in Kazakhstan highlights supply concentration risks.
- Long-term contract signing volumes in 2024 fell below replacement rates, inventories have been depleted, and downstream conversion and enrichment prices hit all-time highs.
Copper Market
- Spot prices rose only 2.23% in 2024 but outperformed iron ore by nearly 30%.
- Copper demand is shifting from China's real estate sector toward AI, data centers, grid upgrades, electric vehicles, and renewable energy.
- Supply faces constraints from declining ore grades, production disruptions, long project lead times, and underinvestment.
- Smelting overcapacity is depressing treatment charges, but tight copper concentrate supply will push prices higher.
Price Environment Comparison (Uranium Spot Prices, 2018–2024)
| Year |
Low ($/lb) |
Average ($/lb) |
High ($/lb) |
| 2018 |
Data not provided |
Data not provided |
Data not provided |
| 2019 |
Data not provided |
Data not provided |
Data not provided |
| 2020 |
Data not provided |
Data not provided |
Data not provided |
| 2021 |
Data not provided |
Data not provided |
Data not provided |
| 2022 |
Data not provided |
Data not provided |
Data not provided |
| 2023 |
Data not provided |
Data not provided |
Data not provided |
| 2024 |
Above recent years |
6-year high |
6-year high |
Note: Figure 3 in the original text does not provide specific values, only describes trends.
Companies/Assets Involved
- Microsoft: Signed a 20-year power purchase agreement to support the restart of the Three Mile Island nuclear plant, representing the trend of tech companies turning to nuclear energy (bullish signal).
- Uranium Miners (unnamed): Several junior miners have restarted mines, but this is insufficient to close the supply-demand gap (neutral to bearish).
- Inkai Joint Venture (Kazakhstan): Unexpected shutdown highlights supply risks (bullish for uranium prices).
- Russian Uranium Enrichment Exports: Imposed retaliatory bans, exacerbating supply uncertainty (bullish for uranium prices).
Investment Implications
- Uranium: The current pullback in spot prices and miner stocks represents a buying opportunity in a bull market. Investors should focus on long-term contract signing progress and inventory depletion, prioritizing uranium miners with producing mines or clear expansion plans.
- Copper: The trend of a widening supply-demand gap for copper is clear, and the structural shift in demand reduces its sensitivity to traditional economic cycles and policy risks. Investors can overweight copper miners, especially those benefiting from AI and energy transition-related demand.
- Risk Warnings: Faster-than-expected recovery in uranium supply, reversal of nuclear power policies, worsening copper smelting overcapacity, and global trade wars dampening industrial demand.
Theme and Background
This chapter focuses on the investment outlook for precious metals (gold and silver) in 2025. The report argues that driven by multiple factors including central bank gold purchases, geopolitical risks, inflationary pressures, and industrial demand, both gold and silver possess strong upside potential. Market demand for precious metals as safe-haven assets and strategic reserves is structurally rising.
Core Views
- Gold: Large-scale gold purchases by central banks and sovereign entities were the core driver of gold's price surge in 2024. This trend is expected to continue in 2025, offsetting the traditional bearish impacts of high interest rates and a strong US dollar. The report believes gold has broken out of a multi-year consolidation range and entered a new long-term bullish trend.
- Silver: In 2025, supply-side risks for silver (as a byproduct of metals such as lead and zinc) may be more noteworthy than demand-side risks. Despite facing weak demand from the Chinese market and tariff threats, industrial demand from sectors like solar energy and electrification, along with its high correlation with gold, will support silver prices.
Key Arguments and Data
Gold
- Gold prices surged 27.22% in 2024, marking the best performance since 2010 and the third-best since 1980.
- Since the second quarter of 2022, central bank quarterly gold purchases have averaged 287 tonnes, 2.3 times the average quarterly volume of 127 tonnes over the previous decade.
- A June 2024 World Gold Council survey indicated that respondent central banks plan to increase their gold reserves over the next 12 months.
- Emerging market and developing economies (EMDEs) are the fastest-growing gold buyers, viewing gold as a hedge against global power shifts, systemic financial risks, sanctions, and changes in the international monetary system.
- Most central banks expect the share of the US dollar in their total reserves to decline, while the share of gold is expected to rise over the next five years.
Silver
- Silver prices rose 21.46% in 2024, breaking out of a multi-year consolidation range.
- Approximately 80% of silver supply is a byproduct of lead, zinc, and other metal mining. If Chinese demand for lead and zinc weakens, it could lead to a decline in silver supply, creating upward price pressure.
- Solar energy costs have already become significantly lower than traditional energy sources such as coal and natural gas. Even with subsidy cuts, solar installation rates are expected to remain robust in 2025.
Comparative Data
| Indicator |
Gold |
Silver |
| 2024 Price Gain |
27.22% |
21.46% |
| Core Drivers |
Central bank gold purchases (quarterly average 287 tonnes, double the previous decade) |
Supply-side risk (80% byproduct) + Industrial demand (solar energy) |
| Technical Signals |
Breakout from multi-year consolidation, new long-term bullish trend |
Breakout from multi-year consolidation, chart patterns pointing to higher prices |
| Key Risks |
High interest rates, strong US dollar (already offset by central bank gold purchases) |
Weak Chinese market demand, solar tariffs |
Companies/Assets Involved
- Pure-play copper miners: The report argues that these companies will benefit from potential copper price increases due to operational leverage. However, this chapter does not name specific companies.
- Gold (spot): Bullish. Central bank gold purchases, geopolitics, and inflation are core supports.
- Silver (spot): Bullish. Supply-side vulnerability (byproduct production cuts) and industrial demand from solar energy are the main logic.
Investment Implications
- Gold: Investors should focus on the sustainability of central bank gold purchase trends, particularly purchases by EMDEs. Gold's strategic allocation value is rising as a hedge against geopolitical risks and the weakening of US dollar credit. The technical breakout from a multi-year consolidation suggests long-term upside potential has opened.
- Silver: Investors need to be wary of supply-side contraction risks (lead-zinc mine production cuts), which could act as a stronger price catalyst than demand-side factors. Industrial demand growth from solar energy and electrification, along with its linkage to gold, forms the core logic supporting silver prices. Technical indicators also show bullish signals.
Theme and Background
This chapter focuses on the overall performance of the Critical Materials sector in 2024, covering sub-sector indices and spot price trends for lithium, nickel, uranium, copper, and others. The report notes that the sector faced broad pressure in 2024, primarily dragged down by weak demand from China, policy uncertainty surrounding the IRA following the U.S. election, and persistent oversupply in lithium and nickel. However, copper and precious metals (gold, silver) performed relatively strongly.
Core Views
The author argues that the Critical Materials sector experienced significant divergence in 2024: Copper and precious metals (gold, silver) rose against the trend, while lithium, nickel, and uranium saw substantial pullbacks. A counterintuitive observation is that despite a 19.78% decline in uranium spot prices, the uranium miners index fell only 13.10%, indicating the market still holds confidence in uranium's long-term fundamentals. In contrast, the lithium miners index plunged 44.52%, far exceeding the spot price decline (-23.89%), reflecting extreme pessimism about the profitability outlook for the lithium industry.
Key Arguments and Data
2024 Critical Materials Indices vs. Spot Price Performance
| Indicator |
December 31, 2024 |
December 31, 2023 |
Change |
Annual Change |
| Nasdaq Sprott Critical Materials™ Index |
849.53 |
985.91 |
-136.39 |
-13.83% |
| Nasdaq Sprott Lithium Miners™ Index |
408.60 |
736.47 |
-327.87 |
-44.52% |
| North Shore Global Uranium Mining Index |
3,342.43 |
3,846.25 |
-503.82 |
-13.10% |
| Solactive Global Copper Miners Index |
1,101.10 |
1,046.28 |
+54.82 |
+5.24% |
| Nasdaq Sprott Nickel Miners™ Index |
513.55 |
661.01 |
-147.46 |
-22.31% |
| Nasdaq Sprott Junior Copper Miners™ Index |
1,067.70 |
967.43 |
+100.26 |
+10.36% |
| NYSE Arca Gold Miners Index |
956.60 |
876.44 |
+80.16 |
+9.15% |
| Nasdaq Sprott Junior Uranium Miners™ Index |
1,213.77 |
1,454.75 |
-240.98 |
-16.57% |
Spot Price Performance
| Commodity |
Price on December 31, 2024 |
Price on December 31, 2023 |
Annual Change |
| Lithium Carbonate Spot (USD/lb) |
4.69 |
6.16 |
-23.89% |
| U3O8 Uranium Spot (USD/lb) |
73.00 |
91.00 |
-19.78% |
| LME Copper Spot (USD/lb) |
3.92 |
3.84 |
+2.23% |
| LME Nickel Spot (USD/lb) |
6.85 |
7.43 |
-7.72% |
| Gold Spot (USD/oz) |
2,624.50 |
2,062.98 |
+27.22% |
| Silver Spot (USD/oz) |
28.90 |
23.80 |
+21.46% |
Key Data Interpretation:
- Lithium: The lithium miners index plunged 44.52%, far exceeding the lithium carbonate spot price decline (-23.89%), indicating heightened market concern over the profitability of lithium mining companies, likely due to oversupply and persistently low prices.
- Uranium: Uranium spot prices fell 19.78%, but the uranium miners index dropped only 13.10%, and the junior uranium miners index fell 16.57%, with declines smaller than those for lithium and nickel, suggesting the uranium sector was relatively resilient.
- Copper: The copper miners index rose 5.24%, and the junior copper miners index gained 10.36%, both outperforming the copper spot price increase (+2.23%), reflecting market expectations of a widening supply-demand gap for copper.
- Gold and Silver: Gold rose 27.22% (its best annual performance since 2010), and silver gained 21.46%, driven primarily by continued central bank gold purchases and exhausted selling pressure.
Market Background:
- The Critical Materials sector peaked in May 2024 before retreating, mainly due to persistently deteriorating Chinese economic growth data.
- After Trump's election victory, market concerns intensified over the potential repeal of the Inflation Reduction Act (IRA), further dampening sector sentiment.
- In contrast, the S&P 500 Index delivered returns above +20% for the second consecutive year (+23.31% in 2024), supported by earnings growth, Federal Reserve rate cuts, a strong economy, and record capital inflows, despite rising U.S. Treasury yields and a stronger U.S. dollar.
Companies/Assets Involved
This chapter does not mention specific company names but covers the following asset classes through indices and spot prices:
- Lithium Miners: Nasdaq Sprott Lithium Miners™ Index (Bearish, -44.52%)
- Uranium Miners: North Shore Global Uranium Mining Index (Bearish, -13.10%); Nasdaq Sprott Junior Uranium Miners™ Index (Bearish, -16.57%)
- Copper Miners: Solactive Global Copper Miners Index (Bullish, +5.24%); Nasdaq Sprott Junior Copper Miners™ Index (Bullish, +10.36%)
- Nickel Miners: Nasdaq Sprott Nickel Miners™ Index (Bearish, -22.31%)
- Gold Miners: NYSE Arca Gold Miners Index (Bullish, +9.15%)
- Physical Assets: Lithium Carbonate, Uranium, Copper, Nickel, Gold, Silver Spot
Investment Implications
- Bearish on Lithium and Nickel: The lithium and nickel sectors declined for the third consecutive year, with the oversupply pattern unchanged. Investors should avoid related mining stocks until signs of supply-demand rebalancing emerge.
- Bullish on Copper: The copper miners index rose against the trend, supported by the logic of a widening supply-demand gap. Junior copper miners showed greater elasticity (+10.36%) and can be considered for long-term allocation.
- Bullish on Gold and Silver: Gold posted its best annual performance since 2010, with central bank gold purchases continuing. Silver broke through a decade-high, and the precious metals sector still has upside potential.
- Cautious on Uranium: Uranium spot prices corrected, but the miners index was relatively resilient. If nuclear power demand expectations materialize in 2025, the uranium sector may regain upward momentum, though near-term catalysts are needed.